The Harley-Davidson Motor Company is likely the most shining example of continued success in today’s business world. Their grasp of the motorcycle industry is incomparable, and their growth is unprecedented. Now, with over a century of experience under their belt, brand recognition, combined with a widespread dealer network and customer kindred through the Harley Owners Group, they have become the envy of their competition. Much of their success can be attributed to highly effective relationship management. By placing a high value on worker empowerment and interaction and by emphasizing the relationships between employees, their unions, and their suppliers, the company has found new levels of success.

During the early 90s, it was evident that demand was going to exceed production capacity and plans were under consideration to build a second final assembly plant. This would be the first production facility the Motor Company would build from the ground up. The history behind Harley-Davidson coming to Kansas City was recently shared with me by the man who was assigned to locate, build and operate the new facility; current VP/Plant Manager, Karl Eberle. Karl’s prior experience and keen focus on leadership was critical in him being chosen for this responsibility. His own personal history and the stories he shared on how all this came to be, left me with an insatiable appetite for more. It also gave me, as a writer for Cycle Connections, an exciting opportunity to pass them along to you.

For several weeks, I had pestered Kate Pella, Communications Manager of the Kansas City facility, before she succeeded in gaining an opening on Karl’s calendar. My anticipation for this meeting was exceedingly high. The prospect of interviewing one of two VP/Assembly Plant Managers, with permission to share some of the company’s history, would be one of the most unique opportunities ever presented to me.

It was a drizzly Monday afternoon in mid-October when I rode out to the plant to meet with Karl and Kate. Kate met me in security and escorted me to the mezzanine level where Karl’s long glass-walled office is located. Their offices are above the plant painting area and overlook fabrication. Just around the corner from his office, we met in the Plant Leadership Group (PLG) conference room. Complete with 20 or so, black leather chairs that are positioned around a large hardwood and etched-glass table, this is not your typical boardroom. On the far wall is a large, framed cloth 100th Anniversary insignia, and on the front wall, behind the head of the table is a large traditional Harley-Davidson badge in black and silver, mounted in a striking black wood frame.

As we settled into our seats at the foot of the table, Karl’s friendly demeanor put me right at ease. He is a distinguished looking gentleman, early 50s, about 5’ 9”. Dressed in jeans and a short sleeve denim shirt with colored embroidery commemorating the Company’s 100th anniversary, his disposition was calm and confident. He spoke with the experience of years of manufacturing, and with an unmistakable Wisconsin accent. I began by discussing the history of Cycle Connections and its role in the motorcycle industry. I explained that my desire was to do a series of stories on the facility itself, to give our readers some insight into plant operations. I also felt it was important to cover the circumstances of Kansas City being the choice for Harley-Davidson’s newest at that time, assembly plant. And for future stories, assembly line operations, sub-assembly processes and facility maintenance would be topics to consider.

My questions from previous tours had already exposed me to the unique managerial philosophy that currently exists only at this plant. Although he expected to speak about the operations of his facility, I told him that my research identified interesting information about him, and that if shared, would spark some real public interest. So, I asked him to tell us about himself. He said “Where do I start?” I said “at the beginning.” And for the better part of the next 50 minutes he shared many of his personal and professional experiences; adding humorous anecdotes along the way.

His parents were born and raised in Switzerland and had earned their living as cheese makers. They moved to the states before Karl’s birth and settled near New Glaris, Wisconsin; about 60 miles south/southeast of Madison. While discussing their profession, Karl replied “I didn’t know what I wanted to be, but I knew I wasn’t gonna be a cheese maker. To this day, I can’t touch cheese!” Growing up with three brothers and three sisters in rural Wisconsin, Karl attended a one room schoolhouse and had the same teacher through seventh grade. He humbly expressed, “I was pretty dumb when I got out of that school.” From there he transferred to a Catholic school, where under the daily tutelage of a nun, Karl found his desire to learn. He acknowledged that she “helped me get caught up.” His respect for his teacher was so great that 20 years later, he spent time locating her and paid her a visit to show his appreciation.

Determined not to continue on with his father’s profession, Karl enrolled in the Milwaukee School of Engineering. While in college, Karl worked for a McDonald’s restaurant that coincidentally was only one block away from the Juneau Avenue Corporate offices of Harley-Davidson. “To think I was going to work for somebody a block away, 20 years later? I just never dreamed it would happen.” Karl completed his bachelor’s degree in Electrical Engineering and landed his first real job with Motorola, in the Chicago area. Within a short period of time, they had relocated him to San Mateo, California, where the lifestyle and cost of living just didn’t suit him.

Karl left Motorola and moved back to the small town of Beaver Dam, Wisconsin. “Home of 15,000 busy beavers” he joked, when referring to a welcome sign on the way into town. He took a job with John Deere’s Consumer Product Division and for the next 17 years, Karl worked in a variety of roles for John Deere in facility maintenance, materials and production. He eventually worked his way into a leadership role as Division Manager, High Volume Products in the Paint Shop. Here, his group was responsible for painting and assembling nearly 400 garden tractors per shift. Offered several opportunities by John Deere to transfer, Karl declined. In 1990, he accepted an offer to join Harley-Davidson and took a position at their final assembly plant in York, Pennsylvania.

For both Karl and the Motor Company, the timing of the move was just right. The York facility had just completed an exhaustive study to replace their paint shop, and the last step was to authorize the purchase order. With a background in high volume painting, Karl’s first assignment was to evaluate the engineering study and make a recommendation. His suggestion was a risky one; drop the proposed liquid clear process and switch to powder. With significant time already invested in research, testing and implementation for the new clear coat process, his recommendation was scrutinized and challenged. He remembers being asked, “Are you sure you know what you’re doing?”

Karl’s recommendation clearly had the potential to be career limiting, with large fiscal and production consequences should it fail. It didn’t help that no one within the company at that time, had experience with powder. But Karl was secure in his proposal. He had worked with PPG before and had established a positive relationship with them. His confidence was driven in part by his trust in PPG. “You know how you establish and develop relationships with people. You know which ones you put a lot of confidence in. I felt pretty secure.” And with that, they accepted his guidance and changed their plans. Later, Karl recognized that maybe it was a bigger risk than he initially thought: “In retrospect, it was a huge decision to make.” This would be the first in a long line of big decisions that would be Karl’s responsibility. He demonstrated effective judgment in placing confidence in the right people. The long term success of his recommendation became a cornerstone of executive support, paving the way for significant responsibilities in his future.

Karl remained at the York facility for almost three years before he was asked to transfer to Northern Wisconsin’s Tomahawk facility. Previously a boat manufacturing plant, Tomahawk was located in a sparsely populated but heavily wooded area. Karl’s take on the location; “This was a highly desirable place to work. If you don’t work for Harley-Davidson, you’re cutting trees down in the forest.” Here they specialized in manufacturing of non-metallic parts, including windshields, hard bags, side covers and side cars. They also supplied special order replacement parts for older models, with delivery in original colors. This combination of special orders and new products was a manufacturing challenge, particularly when attempting to maintain production schedules for new parts. Under Karl’s leadership, Tomahawk developed a reputation for delivering quality and volume, on time. This reputation was further enhanced as improvements in paint capability across the company were now being driven by this facility. Karl’s unprecedented vision of “relational leadership” began to form while he was at Tomahawk, as he explained; “Working with employees and suppliers, I learned a lot about people; what it takes to motivate them. I learned how to make changes that I didn’t think were feasible.”

In late 1994, Rich Teerlink, then CEO of Harley-Davidson, discussed with Karl the company’s need for a new assembly plant. Per Karl, “Rich was a pretty involved guy, very much a relationship driven leader; a very dynamic spokesperson for the company.” Motorcycle production was nearly at capacity, but demand was still growing and any extensions of customer delivery times could contribute to lost sales. Rich directed Karl to “Find us a place to build a new factory, and don’t do it like we do everything today; just think out of the box.” Karl’s interest was sparked, “Can I REALLY think out of the box?” Rich answered “Yes, do it! And if you need my help, let me know.” A $90.1 million assembly plant was now in Karl’s hands, but Rich did have one other significant prerequisite: “You’re gonna do this with two union guys.” Union representation was to be integrated into the site search.

This requirement was driven by an important lesson Harley-Davidson had learned during the AMF years; success is dependent on maintaining a strong, partnering relationship with their unions. In the long history of labor relations, there have likely been very few circumstances where a manufacturing company integrated union representation into their facility planning, location and design process. The international union presidents from Paper Allied Chemical Energy Amalgamation (PACE) and International Association of Machinist (IAM) were in agreement. They had seen membership declining and besides, how could they refuse? Karl’s appointed team members would be Keith Kirchner, a former PACE member from the Capital Drive Plant, and Jimmy Pinto, Director of Collective Bargaining from the Washington offices of IAM. In their new assignments, Keith and Jimmy would be working with Karl, but would be reporting to their respective Union Presidents.

The initial working relationship for the team was difficult because they knew nothing about each other. Karl reflected, “The only thing we knew we had in common was we were all the same height - short!” Any potential differences of opinions due to contrary business drivers would have to be overcome. After spending time together, the trio became extremely close and formed a solid relationship. Karl said, “It was a very unique experience.” The team then employed Mike Mullis, a nationally recognized specialist in site selection and negotiation. The selection trio of Karl, Steve and Jimmy assembled 30 specific criteria, with different weighted values. These included labor effectiveness, housing affordability, tax structure, airport access with direct flights to Milwaukee, attainment area where air pollution levels were not already high, housing availability, both right-to-work and non right-to-work states, community colleges for potential vocational training and traditional HR support and incentive package comparisons. Additionally, in each community three manufacturing sites would be observed and evaluated for productivity measurements. The group established another important criterion: for the initial visits, they would be in each town for no longer than 24 hours.

Using their established standards, Mike identified multiple locations, which were then reviewed and narrowed down to five. With locations now mapped out, the site selection tour began. Most prospective cities had helicopters awaiting their arrival. Local representation would dash the team around, then wine and dine them with Mayor’s and Governor’s in the finest restaurants in town. But some missed an important point, said Karl: “All the communities but two, made critical errors. They didn’t treat me and the two union guys as partners.” To his dismay, Karl was often seated between the highest ranking officials, while his team members were placed at the far end of the table. “I’d tell 'em the same thing every time, the three of us are operating in consensus and this isn’t gonna work.” This message could not have been clearer; union representatives were on equal ground with Karl in the decision process.

After the initial visits, the list was narrowed down to three locations; Kansas City, Louisville and Omaha. At this point, a decision regarding community living factors would be up to Karl. To evaluate the human side of it, he scheduled follow-up visits with his wife. It was at this time that Kansas City stepped to the head of the pack. When Karl and his wife arrived, they were greeted by staff that had done extensive research on her. “Kansas City by far did the best job! I'll never forget. When EDC came to pick up Tracy and I, they knew as much about her as I did!” said Karl. The final location decision was completed in January of 1996 and was made by consensus between by Keith, Jimmy and Karl. The trio then presented their recommendations to Senior Leadership of Harley-Davidson, which was then approved by the company’s Board of Directors in June 1996. Harley-Davidson was coming to Kansas City!

Construction was started in July of 1996 and completed in September of 1997. The first group of employees was hired shortly thereafter, and the first Sportster rolled off the assembly line in January of 1998. Despite the huge investment the company had made in their new facility, Executive Management’s confidence in Karl’s leadership could not have been more evident. It wasn’t until the Grand Opening ceremony when new CEO, Jeff Bleustein, made his first visit. This confidence was expressed again in 2001 when the Dyna Glide and new VSRC (V-Rod) lines were added to Kansas City’s production responsibilities.

From the beginning, resource utilization at the Kansas City plant was different. Here, organizational structure is largely made up from both salaried and non-salaried assembly teams called Natural Work Groups. Empowerment of team members and encouraging accountability among teammates, without traditional supervision, is contributing to sustained production growth with high morale and without the overhead of middle management. The success of this structure requires people who are willing to do more than assemble parts. Each work group has rotating representation in the plant’s many decision making processes.

There are likely no better examples of utilizing relationship management to achieve the unprecedented success that Harley-Davidson has achieved. Today, as Karl still shares office space with union representatives from PACE and IAM, his position on employee development is; “We’re not teaching people how to build motorcycles; we’re teaching people how to run a factory.”